Abstract
The Turkish automotive industry is heading for a slump, with output set to
fall by 35% in 2009. However,
the country remains attractive to industry
majors, and extra production capacity is planned. This should
ensure a
return to growth from 2010.
In the first two months of 2009, the
Automotive Manufacturers Association (OSD) reported that
automotive
production was down 63% y-o-y, as exports dropped 61.6% y-o-y. It has warned
that even at
this low level of output, stocks will not be fully depleted
until August. BMI forecasts a 35% fall in output
to 745,275 units in 2009.
Commercial vehicle production will be the worst affected, with output down
43% to 298,110 units, while passenger car production is forecast to fall by
28% to 447,165 units. Falling
output comes at a time when carmakers are in
the middle of investing in capacity expansion in Turkey.
BMI expects these
investments to be put on hold until the market recovers, but will they not
be
abandoned - as the Turkish industry will remain a strategically
important and cost-effective base for
supplying the EU. We foresee a
diversification of export destinations, with producers set to take more
advantage of growth in nearby emerging markets. Majors are more likely to
resume output in Turkey than
their West European plants, where production
costs are higher and the markets will remain depressed. A
revival is
likely in 2010 when we anticipate production growth of around 8%,
strengthening to 35% in
2011. By 2013, production should reach 1.28mn
units, an increase of 11% on the record peak that was
seen in 2008.
The domestic market will also be depressed with automotive sales down by 13.5%
to just under 501,500
units, adding further woes to the sector and marking
a third successive year of decline. The commercial
vehicle market will be
markedly affected by a decline in fixed capital formation and a slowdown
in
haulage, with sales set to drop 14.5%. However, 2009 is likely to be
the market' s nadir, with a recovery
expected from 2010 - when sales are
set to rebound by 10.7% to reach near 2008 levels. By 2013, Turkey
should
see its highest annual sales volume, beating the previous record set in 2006
with sales exceeding
714,000.
Despite the downturn, automakers still
regard Turkey as a strategically important production base, and are
planning for the future. A joint venture (JV) between Renault Trucks and
Turkey' s Karsan is one of
several projects to be undertaken by the
industry in 2009. Tofas, the JV between Italian carmaker Fiat
and Turkey' s
Koc Holding, will continue with its EUR290mn (US$365mn) investment plan in
2009. The
project involves research and development (R&D) and production
costs for the new LCV model, which
was scheduled to go on sale in H209.
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